Staff and employers concerned over retirement savings
Hywel Roberts, May 08, 2014
Most UK employees acknowledge they are not saving enough money for their retirement, according to a survey by Towers Watson.
The Global Benefits Attitude report surveyed over 2,000 UK workers about their savings. More than three-quarters (78%) said they are concerned they don't have sufficient savings for their retirement.
More than half (58%) said they do not believe they will be able to afford a retirement of 25 years or longer, while around a third (36%) don't believe they will be better off than their parents were.
Over two-thirds (71%) of employees rely primarily on their workplace pensions to save for their later lives.
John Ball, head of UK pensions at Towers Watson, told HR magazine educating employees about the realities of pensions is imperative.
"It is important they understand what the likelihood is for them to reach retirement age and have an adequate sum of money in their pension pot," he said. "Without this knowledge, the combination of higher life expectancy and inadequate savings inevitably means working for longer.”
More low-paid workers saving
Figures released by the Department for Work and Pensions (DWP) this week show that auto-enrolment has led to more people with lower incomes paying into workplace pensions.
The number of employees in administrative and secretarial positions paying into schemes has risen from 17% in 2011 to 20% today. The number of people in 'elementary occupations', including cleaners and school lunch supervisors, has increased by 130,000, up 8% since 2011.
Laith Khalaf, head of corporate research, Hargreaves Lansdown, told HR magazine the figures indicated it was "so far so good" for auto-enrolment, but that challenges remain.
"Chief among them is making sure these new pension members stay on the savings wagon," he said. "And providing them with the financial education needed to make sense of the wide range of options available when they hit retirement."